Do You Need Umbrella Insurance?

September 28, 2017

One of the most certain things in life is uncertainty. Your dog could bite the neighbor’s kid. Your teen driver could hit a cyclist. A guest could fall down your stairs. A rainy morning commute on worn-out tires could result in a multi-car accident. And you could be held liable to others for the cost of damages – injuries, property destruction, emotional distress, lost wages and more.

Good thing you have insurance. But, wait, your policy covers $300,000 of liability, and, in a lawsuit, you’re judged liable for $1 million. That leaves $700,000 left to pay. How will you cover it?

If you have umbrella insurance and your policy covers the incident, the additional $700,000 will come from your policy. If not, it will come from the assets you have now, such as your home and savings, and from future assets, such as your wages or inheritance.

The fact is, it only takes one serious accident and a resulting lawsuit to put everything you own – and will own – at risk. And it only takes one umbrella policy to help protect it all.

Here are a few things you should know about umbrella insurance:

Personal umbrella policies typically offer between one and five million dollars of liability coverage. Consider your net worth when choosing your coverage –you could be sued for everything you have.
•An umbrella policy is not a stand-alone policy. Your insurance carrier will typically require you to meet certain qualifications, such as having an auto policy with a certain level of liability coverage, in order to purchase umbrella insurance.

Even when you have umbrella insurance, your car or home insurance is your first line of defense. For example, if you are liable for $2 million in a car accident and your auto insurance covers $500,000 of liability, your auto policy covers the first $500,000. Your umbrella policy covers the remaining $1.5 million, assuming your policy covers the incident and that you purchased that much coverage. If you are liable for $250,000 in an accident on your property and your homeowners insurance covers $300,000, your umbrella policy won’t be needed.

If you insure a motorcycle, ATV, golf cart, snowmobile, motorhome, or watercraft, your umbrella policy may provide additional liability coverage on top of those policies as well. Be sure to check with your agent to confirm your coverage on these types of vehicles.

A single umbrella policy typically covers all of your family members who are residents of your household.

Essentially, an umbrella policy gives you excess liability coverage on top of what your other policies provide. If you’re at fault for a serious accident, you’ll need it.

Umbrella insurance also gives you liability coverage in instances where other policies don’t. Examples include driving in a foreign country or renting a boat.

If you’re curious about how umbrella insurance might play a role in protecting the life you’ve built or plan to build, talk to us today.

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“Sheri
I would like to take a moment to thank you for your excellent service. As you know we have all our insurance needs with you (home, vehicles, umbrella). I have followed you for many years. Now that you have your own business, I would like to tell you how I feel about your service. When I was with one of your competitors, I came to see you regarding my insurance needs. You suggested that you increase my underinsurance amounts especially on my Husband’s motorcycle. I switched to your company and followed your advice. You saved me from financial ruin. Jim had an accident. He was hit by a man from CO only carrying state limits of 25,000.00. Since Jim’s medical bills were well over 100,000.00 his insurance would not have been enough. We are so indebted to you and your sound advice. Before I always thought insurance was over rated and an expense. Not anymore. You have never pushed or tried to oversell. You have always found the best deal for us. Sheri you are so appreciated. Thank you again for your fantastic service
Sincerley,
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